Gary Hoover – The $40 Million and $119 Million Dollar Man –> the Co-Founder of BookStop and Hoovers.com Shares the Hidden and Unconventional Things He Did

Gary Hoover

The $40 Million and $119 Million Dollar Man –> the Co-Founder of BookStop and Hoovers.com Shares the Hidden and Unconventional Things He Did

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Most Popular to Share on Google+ and LinkedIN:

1)

Hoover’s Law

“Hoover’s law – your success will be inversely proportional to the square of the number of projects you’re working on. So if you’re working on 2 projects you’ll be 1/4th as successful.”

2)

Key to My $40 Million and $119 Million Success

“The key to my success growing Bookstop and Hoover’s to multi-multimillion dollar companies… I never do 2 things at once. I’m a sequential entrepreneur.”

3)

Epic Business Fail

“Epic business fail — to delegate somebody besides the CEO to answer customer letters. That’s extreme but the head of Build a Bear got over 1000 e-mails each day and personally answered each 1 that was from a customer.”

4)

Why Entrepreneurs are Critical to Society

“Entrepreneurs and the wealth and savings they create, are critical to the health of our society. Don’t listen to anyone who tells you differently.”

5)

Warren Buffett and Motley Fool Wisdom

“Big differentiator – Warren Buffett calls this your “moat”. The Motley Fool guys also. The bolder your idea the more likely it is to have this “moat”. Know it’ll be harder to raise money and advance your idea to a viable business. It’s also well worth it.”

Why listen to Gary:

Gary Hoover, yes of Hoover’s business data service. In case you don’t know, Gary sold Hoover’s for $119 million to Dun and Bradstreet. Gary is an entrepreneur’s entrepreneur having owned Bookstop superstores (bought by Barnes and Noble) as well as other businesses.

Find out how Gary grew and sold 2 separate businesses for tens and hundreds of millions and 1 that grew to billions with the help of Barnes and Noble. Gary reveals lessons learned, mistakes made along the way, and his business mindsets for – what makes a good idea to start a business, – how he successfully grew his businesses, – how his teams came together, – and most importantly how he thinks about the goal of selling the business before he even starts it.

He’s a business historian who now speaks all across the world training entrepreneurs.

His mission is igniting and inspiring entrepreneurs. At the end of this episode he’ll tell us about the exciting project he’s working on right now to reduce the risk in the restaurant industry while having fun at the same time.

“2 truths, 1 lie — I took classes from 4 teachers who won Nobel prizes. My net worth is over $1 million. I’ve flown around the world twice”

Some Shareables from Gary in this episode…

Ideas and Philosophy

“As an entrepreneur you want to have an idea of how to do each important task in your business. Otherwise, you could waste money.”

“My philosophy – there are no tough businesses, there are no easy businesses. There are only businesses you love and businesses you don’t love.”

“Every business is fundamentally hard. Anything worth doing is hard.”

Extreme MBA Innovation

“MBA innovation extreme example — Federal Express was dreamed up as a term paper. His professor thought it was an awful idea. The founder took money from his brother and sister who then sued him because they thought it was going under. Last year it did $35 billion or $40 billion.”

Whole Foods Buy Out

“To sell out? I sat on the Whole Foods Board of Directors. We got a massive offer from a venture capital firm in the Northeast. John Mackey decided to go public instead. Whole Foods ended up buying out this other competitor and the rest is history.”

Thoughts on Conventional Wisdom

Startups, Venture Capital and Exit Plans

“Startup — you don’t have the certainty to start the business and say you’ll exit in 3 years. What you do is build a great enterprise, people love the products, you’re profitable, then all options open up to you.”

“Venture capital — A VC told me ‘If you’ve got an idea that can make me $1 billion in 10 years we’re not a fit. If it could make me $1 billion in 6 months, you don’t need me. My investments and partnerships last from 5 to 7 years.”

“Exit plans — I never put an exit plan in place on the business because I think it’s ridiculous. You can’t know when or how you’re going to exit. But the minute you take other people’s money the clock starts ticking.”

“Exit plans — I never put an exit plan in place on the business because I think it’s ridiculous. This mindset tells me your heart’s not fully in it. How can you best serve your customers if you’re just focused on selling out?”

“I preach strategies. I let other people focus on tactics because they are so highly variable.”

Youngest Fortune subscriber

“Youngest Fortune subscriber – I was probably the youngest subscriber to Fortune magazine at 12 years old. I’ve loved every part of my entrepreneurial journey since even the hick ups and valleys. The journey and what you’ll learn is well worth it.”

Forbes Wealthiest List

“Forbes Wealthiest List – you can learn a huge amount from reading this list… when you know how. Comparing the people and looking for patterns can give you insights you get nowhere else.”

“Power in the lists — the Fortune 500, Forbes list, Inc. magazines list, can be tremendously powerful when you know how to go through them. There’s so much business wisdom and data that can be gleaned to apply to your business.”

People Love It, Still Fails

“People love it, still fails — People loved Travel Fast Superstores. We did DOUBLE our revenue projections. But the airlines pulled the rug out, no longer paying commissions we were counting on. I went into over $1 million personal debt attempting to save people’s jobs and the company.”

“Too far ahead — Like when Bill Gates introduced the idea of a tablet around 2003, Travel Fast Superstores was effectively doing crowd funding in the mid-1990s. This idea was too far ahead of its time.”

Origins and Business Adventures

“Time machine — if I were to go back to the beginning, I’d focus on fantastically useful products and designing a ‘WOW’ customer experience. I’m working with someone who wants to open a fitness center, a kitchen for people who want to dream up new foods, and 4 or 5 social media startups. The specific tactics will be unique to each industry and the goals of the business owner.”

“Starting over — if I was 30 years old again and starting over in my first business what would I do differently? The answer is nothing because I had to learn those lessons to get to where I am today.”

“I’ve had lots of interesting adventures. I’ve done 5 startups. Bookstop was the most successful with Barnes and Noble buying it from me for $41 million. It went on to be a multibillion-dollar operation. Hoover’s.com was $119 million. I love mentoring founders of startups.”

“Hoover’s.com origin story — I didn’t name it Hoovers. I started a company called ‘The Reference Crest’ to make business reference books. My college friend had a better vision…move it to the Internet. This was 1992 when the Internet was primeval. The company was renamed Hoovers after I was no longer CEO.”

“3rd venture – Travel Fast Superstores. This 1 cost me everything because I held on too long. I sold the house on the lake. I almost went personally bankrupt but avoided that because I don’t believe in it. Lesson learned – perseverance is necessary, but blind perseverance is like beating a dead horse.”

“4th venture – for-profit museums. I love this idea and raised half the money… $7 million. The recession of 2008 cratered business startups. Funding dried up. I still love the idea and may re-kindle it in the future.”

“Origin story – Who leads General Motors? Why was it started? None of my teachers could answer me. I was about 12 and at a newsstand with my sister when I first saw Fortune magazine. My journey as a business enthusiast began.”

Business Ideas as a 12-year-old

“I’ve kept a list of business ideas since I was 12. There’s about 300 ideas on it. I keep a tablet in my pocket because all the cool and even mundane things I see spark ideas at the most unexpected times. I’ve learned to capture those when inspiration strikes.”

“Don’t have a good business idea? Don’t think or know how to generate one? I’ve got over 310 ideas on my business list. I wrote a book and teach a course on how to generate good business ideas. So don’t let this hurdle stop you.”

Thoughts on Failure

“Failure — I was having dinner with a couple buddies and this topic came up. I’ve spent lots of time studying failure and success. You learn from failure. You fail every day whether it be little ones or giant ones. What’s most important is how you emotionally cope with those failures.”

“Tactical mistake — I wouldn’t sign a personal guarantee on a lease again. Made this mistake with Bookstop. My lawyer and real estate agent tried to talk me out of it but I didn’t listen. I learned my lesson.”

“Valley of death — when you’re trying to raise money to grow but you’re out of cash and missing payroll, you’ll likely take money from anyone. I’ve made this mistake. If you can, be smart about whose money you take because not every partner is ideal.”

“Funding mismatch — not every investor is ideal. If your time horizon is to sell in 10 years but there’s is 2 years, you’ve got a decision to make. I’d recommend passing on their investment.”

“Taking business off track — I remember when my internal team at Bookstop almost fired me because they felt I wasted money on an institutional ad. My advertising team placed the ad above every urinal so I’d see it for the next year. Listen to your counsel but know you’ll still make mistakes.”

“Biggest business fail is to focus on investors and lawyers. If you go a whole 24 hours without talking to at least 2 or 3 customers then you’re taking your business off track.”

“Epic business fail — to delegate somebody besides the CEO to answer customer letters. That’s extreme but the head of Build a Bear got over 1000 e-mails each day and personally answered each 1 that was from a customer.”

Traits of Hard-Core Entrepreneurs

“Hard-Core Entrepreneur — by nature they’re curious and adventurous. If mom’s got 4 kids and says ‘Don’t touch the stove because it’s hot’ the kid who touches the stove is the entrepreneur in the family.”

“CEO customer service — Patrick Spain made Hoover’s successful. He answered customer letters. If a customer wrote in saying a company should be covered, Patrick would research and if he agreed the company would be up on Hoover’s within 24 hours.”

Thoughts on Venture Capital

“Venture capital represents only about 3% of startups. This comes straight from business schools and VCs. Everything has to line up right… industry, market timing, idea, business owner and investors time horizon. That’s why the percentage is so low.”

“I’ve sat in board meetings where people said ‘We’ve got to be big. Let’s sell.’ I told them Wal-Mart never felt that way when they were a $40 million company in a little town in Arkansas.”

“Leadership – I grew up in a General Motors factory town, Anderson IN, 60,000 pop. 27,000 worked for GM. My schoolteachers taught about presidents and Civil War generals. My classmates wanted to be president, NBA stars, or Firefighters. I wondered who was leading General Motors? I really wanted to be a business leader.”

Thoughts on Ideas

“On ideas – the 70% to 80% of the ideas people tell me I ask them, ‘What’s new or preferred about that? ‘This is especially true with Web and social media ideas and extends to business ideas in general.”

“Big idea versus rehash — ‘Well it kind of works like Facebook but does this instead’. I probe them for the real differentiator and they say something like ‘It’s green instead of blue’. A big idea is a massive leap forward like the release of the 1st iPhone. You don’t have to be that big but think along those lines.”

“Big differentiator – Warren Buffett calls this your “moat”. The Motley Fool guys also. The bolder your idea the more likely it is to have this “moat”. Know it’ll be harder to raise money and advance your idea to a viable business. It’s also well worth it.”

“The bold idea – the bolder and more innovative your idea the harder it’ll be to raise funds and grow your business into a viable, profitable and sustainable business. 99% of MBAs can’t do it.”

Thoughts on Cirque du Soleil and Alamo Draft House

“Something really cool and different — the minds to create this aren’t coming out of the woodwork nor out of business schools. Cirque du Soleil and the Leaks guys who are doing Alamo Draft House… those type of creators and innovators are 1 in a million.”

Business Schools – Valuable or Not?

“MBA programs — it’s a shame with all the brainpower, time and money invested that there’s so much cloning and the lack of innovative thinking coming out of these programs.”

“Business schools — I believe most of them have it backwards. A lot of the professors never founded nor ran their own business. They teach chase the money…money first. Go for purpose 1st and get really clear on WHY YOU’RE DOING THIS. Then check to see if people will pay you for it.”

“MBA innovation extreme example — Federal Express was dreamed up as a term paper. His professor thought it was an awful idea. The founder took money from his brother and sister who then sued him because they thought it was going under. Last year it did $35 billion or $40 billion.”

“Business school is tactical teaching accounting and marketing and such. A real entrepreneurship program gets into the emotional issues. It gives ideas for what to do when a spouse is against you becoming an entrepreneur.”

“I believe entrepreneurship should be taken out of business schools. Entrepreneurship is a mindset. It’s an attitude toward life. It means you see opportunities everywhere you look. You’re optimistic and always think there’s a better way to do something.”

On Innovation and My Proudest Innovation

“On innovation — there’s a huge range between hard-core, pure innovation that’s a new idea VS. those built on the backs of others ideas.”

“My proudest innovation – I adapted the Toys ‘R’ Us idea when I founded Bookstop in the 1980s. This was a middle level heavy-duty innovation. Toys were different sizes and serve different customers than books.”

“The Steve Jobs conundrum – Steve Jobs was in his own world. I urge my students not to attempt to be like him for lots of different reasons. Namely you’re not the level of visionary he is so focus on where your talents are.”

IPhone Alone Beats Proctor and Gamble?

“IPhone fun fact — the iPhone did as much revenue last year as the entirety of Procter and Gamble (the world’s largest packaged goods maker). They both did about $90 billion.”

On Entrepreneurship

“On entrepreneurship — entrepreneurs have confidence in their ability to learn how to do everything they’ll need to, hire someone, or find the right consultant.”

“Entrepreneurship is an approach to life…it’s a problem-solving mindset. It’s every bit as important in government, hospitals, nonprofits and philanthropy as it is in the business world. It’s more badly needed in these areas because it’s naturally in business.”

“Entrepreneurs and the wealth and savings they create, are critical to the health of our society. Don’t listen to anyone who tells you differently.”

“The most important thing to lead a business — be curious. Just learn and learn. Look around with wonder because you never know where a business improvement idea will spark from.”

“Teaching entrepreneurs — when I’m teaching courses or group sessions I share the strategies that worked for me and are proven to work. Only when I Mentor one-on-one do I get into tactics because they are so highly variable.”

“Business success — all the tactics of it turn on ‘What is your purpose?’ That’s the key. You gotta start with ‘Why are you doing this??!!’ If your answer is, ‘Just to make money’ you’re probably not gonna.”

Thoughts on Passive Income

“On passive income — I’m not a fan of that term. I believe ingenuity or subscription income. The way IBM did well during the Great Depression was they never sold computers. They leased them monthly.”

“On passive income — when Hoover’s went public the Wall Street guys told us no one would pay for subscriptions we should just sell ads. We kept subscriptions, licensed content, sold books and ads. This was 1999 and soon after the ad market collapsed. We were glad we didn’t listen to them.”

Hoover’s Law to Success

“The key to my success growing Bookstop and Hoover’s to multi-multimillion dollar companies… I never do 2 things at once. I’m a sequential entrepreneur.”

“Hoover’s law – your success will be inversely proportional to the square of the number of projects you’re working on.”

“Hoover’s law – your success will be inversely proportional to the square of the number of projects you’re working on. So if you’re working on 2 projects you’ll be 1/4th as successful.”

Why Restaurants and Retail are Killer Industries

“Research myth — American Express published a study that 50% of all restaurants fail by year 3. The study has since been taken down and disproven. The restaurant success rate is much higher than that.”

“Love affair with retail – My first love may have been retail in 8th grade. My 8th grade term paper was the life story of Marshall Fields. Thankfully, I’m not still in Bookstop fighting against Amazon and e-books. I’d like to think my interest in business history and trends saved me.”

“The restaurant industry is the best run and most entrepreneurial industry on earth. That’s food trucks, convenience stores, fine dining, people in Asia or Africa selling food to their neighbors, and all the way up to Whole Foods, Kroger and Wal-Mart. It’s unbelievable the diversity, safety and the efficiency.”

“I go and urge all my students to go to the Southwest food Expo. Even if they’re doing a social media or tech startup they should go because entrepreneurship is in the air. You’ll pass the senior vice president of McDonald’s and the owner of a local food truck learning from each other.”

“I believe the restaurant industry has created more millionaires than any other industry.”

What is Bigwig Games?

“What is bigwig games? We want you to build real-world skills to grow your business but in a virtual environment so there’s less risk. My plan is for 90 industries. These games all came out of boardgames I created when I was 12 years old and are adapted for our mobile world.”